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                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, February 27, 1993                   TAG: 9302270162
SECTION: BUSINESS                    PAGE: A-10   EDITION: METRO 
SOURCE: Knight-Ridder/Tribune
DATELINE: LAS VEGAS                                LENGTH: Short

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LUMBER COSTS FRET BUILDERS

At the recent National Association of Home Builders convention, President Clinton's economic proposals were overshadowed by a much more urgent issue for builders: soaring lumber prices.

Since early October, the price of softwood lumber has increased about 85 percent, rising from $250 for 1,000 board feet to $464 this week. The effect is to add about $3,500 to the cost of building a 2,000-square-foot home.

For many builders, this is a battle of economics versus environment. Several wore bright red buttons proclaiming, "Axe Rising Lumber Prices."

Prices have been driven up by several factors. An improving economy is increasing demand for lumber. Florida is rebuilding after Hurricane Andrew. Wet weather has limited logging in many parts of the country. A bidding war is driving prices up.

And the addition of a robin-sized sea bird called the murrelet to the U.S. government's list of threatened species will trigger new logging restrictions on federal lands in the Pacific Northwest.

"There has been a lot of panic-buying of lumber in the last couple weeks," said Michael Carliner, an homebuilders' economist. "This is a price spike; it has happened before. But each time the spike goes higher."

Carliner said he anticipates that lumber prices soon will drop to about $300 for 1,000 board feet and average about $350 for the year, up about 25 percent from a year ago.

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